CHICAGO, Aug. 24, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Wells Fargo & Company (NYSE: WFC),
JPMorgan Chase & Co. (NYSE: JPM) SunTrust Banks
Inc. (NYSE: STI) Citigroup Inc. (NYSE: C)
and Bank of America Corporation (NYSE: BAC).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the
free Profit from the Pros newsletter:
http://at.zacks.com/?id=5513
Here are highlights from Tuesday's Analyst Blog:
Wells Fargo Stops Debit Rewards
Yesterday, Wells Fargo &
Company (NYSE: WFC) announced its plan of scraping debit card
rewards program for its existing customers, effective October.
Previously, in March, Wells Fargo halted the program for its new
customers.
This is an attempt on Wells Fargo's part to reduce its losses
from the cap on debit-interchange fees, as proposed by the Durbin
Amendment. The change includes stand-alone programs as well as
those where customers have combined their debit and credit card
into a single program.
For every swipe of a debit card, the related bank charges a fee
to the retailer. The bank then shares this amount with its card
partners. The charged amount is called interchange fees.
The banks generally award points to customers for carrying high
balances, using card for payments and making minimum deposits.
Wells Fargo offers programs that
provide cash back, travel and merchandise awards as well as gift
cards as rewards, when customers redeem their reward points.
Wells Fargo's present debit
card users earn 1 reward point for every $4 spent through the card and up to 16 points for
every $1 spent online at select
retailers. To earn reward points, the customers pay an annual fee
of $12, which would no longer be
charged once the program ends.
According to the Federal Reserve's data for 2009, on average,
banks charge a retailer 44 cents per
transaction as interchange fee. Though the amount seems small, the
extensive use of debit cards totals to a solid $16 billion for the industry every year.
Effective October 2011, the Fed
implemented a limit on debit-interchange fees at 21 cents per transaction and an additional 0.05%
of the purchase price to cover up the cost of scam protection.
Since July 19, JPMorgan Chase
& Co. (NYSE: JPM) has also stopped offering reward points
to its existing debit card users. Besides, the company has halted
the reward program for its new customers since February 8.
Apart from Wells Fargo and JPMorgan, SunTrust Banks Inc.
(NYSE: STI) also followed the same suite. The company also affirmed
that points already earned by the users would expire on
January 1, 2012.
Last week, Wells Fargo stated that, starting October 14, it will charge customers in
Georgia, New Mexico, Nevada and Oregon a monthly fee of $3 for using a debit card.
JPMorgan has already imposed a $3
monthly fee on its debit cards and a $15 fee on its checking accounts earlier this
year in some of its operating areas on a trial basis. The company
has also stopped issuing debit rewards. The tests runs are still in
progress.
JPMorgan has also contemplated a limit of $50 to $100 per transaction on customers' debit
card along with other major banks including Citigroup Inc.
(NYSE: C) and Bank of America Corporation (NYSE: BAC).
Moreover, BofA has already raised its ATM fee to $3.
Basically, these banks are in the pursuit of a recovery route
from their lost debit card fees. Wells Fargo alone would salvage $200 million in losses from the debit card fee.
However, if implemented nationwide, it would affect as many as 40
million customers of the company.
Therefore, the banks' spree of loss recovery is ultimately
defeating the actual purpose of the new laws as the cost-shift
cycle is eventually being passed on to the consumers.
Currently, Wells Fargo retains a Zacks # 3 Rank, which
translates into a short-term Hold rating. Also, considering the
fundamentals, we are maintaining a long-term Neutral recommendation
on the stock.
Want more from Zacks Equity Research? Subscribe to the free
Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and
qualitative analysis to help investors know what stocks to buy and
which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly
traded stocks. Our analysts are organized by industry which gives
them keen insights to developments that affect company profits and
stock performance. Recommendations and target prices are six-month
time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides
highlights of the latest analysis from Zacks Equity Research.
Subscribe to this free newsletter today:
http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc.,
which was formed in 1978 by Leon
Zacks. As a PhD from MIT Len knew he could find patterns in
stock market data that would lead to superior investment results.
Amongst his many accomplishments was the formation of his
proprietary stock picking system; the Zacks Rank, which continues
to outperform the market by nearly a 3 to 1 margin. The best way to
unlock the profitable stock recommendations and market insights of
Zacks Investment Research is through our free daily email
newsletter; Profit from the Pros. In short, it's your steady flow
of Profitable ideas GUARANTEED to be worth your time! Register for
your free subscription to Profit from the Pros at
http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the
performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook:
http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
making any investments. Nothing herein should be construed as an
offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.